The ability of Rhodotorula mucilaginosa 2 and Candida utilis in its free and immobilized cases on two different matrices Ca-alginate and chitosan to treated industrial oil waste water were investigated. R. mucilaginosa 2 and C. utilis were isolated from industrial oil waste water and identified morphologically under light microscope (40X) and biochemically by using API 20 CAUX (bioMérieux) identification kit. Oil and greases (O&G), chemical oxygen demand (COD), total dissolved solid (TDS) and electric conductivity (EC) were estimated as indicator for treatment of industrial oil waste after 2, 4 and 6 days. The ability of R. mucilaginosa 2 for treatment oil waste water was higher than the ability of Candida utilis in which free R. mucilaginosa 2 gave degradation efficiency of removal of O&G, COD, TDS and EC were 50%, 70%, 30% and 8% respectively. The efficiency of removal of oil, COD, TDS and EC by immobilized R. mucilaginosa 2on Ca-alginate was 60%, 77%, 37% and 14% respectively. On other hand the removal efficiency rate of oil, COD, TDS and EC by immobilized cells on chitosan was 70%, 77%, 37% and 15% respectively. The removal efficiency of O&G, COD, TDS and EC by free Candida utilis after 6 days of treatment were 21%, 54%, 12% and 16% respectively. The efficiency of removal of oil, COD, TDS and EC by immobilized Candida utilis on Ca-alginate was 60%, 65%, 29% and 19% respectively, on the other hand, the removal efficiency of O&G, COD, TDS and EC by immobilized Candida utilis on chitosan was 60%, 76%, 41% and 37% respectively. The results indicated that immobilized substrate types was an important factor to affect degradation ability of R. mucilaginosa 2 and Candida utilis.